Integrated Energy System Planning (IESP): A Framework for Québec’s Energy Transition

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Summary

Integrated Energy System Planning (IESP): The Future of Québec’s Energy Transition

Québec stands at a pivotal moment in its energy evolution. With electrification accelerating, we must modernize our grid, integrate renewables, and ensure energy security. Our Integrated Energy System Planning (IESP) framework offers a roadmap to optimize resources, balance supply and demand, and build a sustainable future. Let’s shape an efficient and resilient energy system!

(LinkedIn : https://www.linkedin.com/pulse/integrated-energy-system-planning-iesp-framework-qu%25C3%25A9becs-marcoux-wc95e/)

Introduction: Québec at the Crossroads of Electrification

As the global shift toward decarbonization accelerates, Québec stands at a pivotal juncture. The province faces several challenges, including the need to modernize grid infrastructure, improve reliability, integrate growing renewable energy sources, and address increasing electricity demand in sectors such as transportation and industry.

Opportunities are equally abundant. As the most electrified jurisdiction in North America, Québec has a strong foundation in its vast hydroelectric resources and its large electrical equipment manufacturing industry. This expertise positions the province to lead in clean energy exports. However, limited interconnections with neighbouring states and provinces present a significant hurdle, constraining Québec’s ability to optimize energy trade.

Achieving a sustainable, electrified economy requires a robust and flexible planning approach that aligns energy supply, infrastructure, and emerging demands. Recognizing these dynamics, Québec’s Ministry of Economy, Innovation and Energy (Ministère de l’Économie, de l’Innovation et de l’Énergie du Québec (MEIE)) has initiated work on an Integrated Energy System Planning (IESP; in French: Plan intégré des ressources énergétiques, PGIRE). This integrated plan aims to navigate these challenges and opportunities effectively, engaging a diverse set of stakeholders to ensure its success.

This document outlines my own perspective on IESP, aiming to contribute to ongoing discussions and provide insights into best practices and strategies for its development and effective implementation. I am an independent consultant and I am not paid by the government or Hydro Québec .

What Is Integrated Energy System Planning?

Integrated Energy System Planning is a strategic framework that coordinates the development and operation of interconnected energy systems. By integrating multiple energy carriers such as electricity, natural gas, hydrogen, and thermal energy across sectors like transportation, buildings, and industry, IESP enables efficient, resilient, and sustainable energy delivery. For example, an IESP could document future electricity demand scenarios in a rapidly growing city, identify potential renewable energy sources like wind or solar farms to meet this demand, and plan the phase-out of natural gas for heating, along with the necessary transmission and distribution infrastructure upgrades. This ensures that energy supply and demand remain balanced while minimizing risks, costs, and environmental impacts, and improving reliability and resilience.

The energy transition entails greater electrification, reflecting the increasing importance of electricity in heating, transportation, and industrial processes. However, other energy sources will still be used, such as renewable natural gas and biomass for heat. Also, for the next few decades, fossil fuels will continue to be used, albeit in a diminishing way. By integrating various energy sources, technologies, and sectors, IESP ensures that the energy system evolves to meet societal, economic, and environmental goals.

IESP differs from Integrated Resource Planning (IRP), which electric utilities often use to forecast and meet electricity demand within the bulk power system. Unlike utility-focused IRPs, IESP encompasses multiple utilities and energy sources, prioritizes energy efficiency, and emphasizes comprehensive system-wide coordination. Some governments, like California, conduct statewide “IRPs” that effectively function as IESPs, which can cause confusion.

Best Practices in IESP

Integrated Energy System Planning involves a holistic and forward-looking approach to align energy supply, infrastructure, and demands. To ensure effective implementation, certain best practices must be embraced:

1. Strategic Direction

  • Clear Mandate: Policymakers outline a strategic vision supported by clear policies, targeting renewable energy goals, emission reductions, reliability, resilience, affordability, and cost efficiency.
  • Scenario Analysis: Testing multiple scenarios prepares for a range of potential developments.
  • Adaptability: Regular updates ensure the plan remains relevant amidst evolving technologies, policies, and conditions.

2. Inclusive Collaboration

  • Stakeholder Engagement: Broad participation reflects societal priorities, fosters trust, and ensures accountability.
  • Interdisciplinary Approach: Cross-sector collaboration prevents siloed planning and promotes integrated solutions.

3. Robust Foundations

  • Data-Driven Decisions: Accurate forecasting models ensure informed and reliable decision-making, particularly in terms of the economic impacts of the scenarios.
  • Funding and Resources: Adequate financial investments support infrastructure development and innovation.
  • Enforcement and Oversight: Continuous monitoring ensures adherence to the plan and addresses emerging challenges.

By following these practices, IESP can create a sustainable, resilient, and inclusive energy system that adapts to future needs. For instance, Denmark has successfully implemented elements of integrated planning by combining wind energy with district heating systems, resulting in increased energy efficiency and reduced emissions. As Québec embarks on its IESP journey, these principles serve as essential guidelines to navigate the complexities of the energy transition and achieve long-term success.

Key Stakeholders in IESP

Integrated Energy System Planning succeeds when diverse stakeholders collaborate effectively. Key contributors include government and regulatory bodies, utilities, grid operators, equipment manufacturers, knowledge and innovation leaders, local communities, and advocacy groups. This collective effort ensures that expertise from various domains shapes a resilient and inclusive energy system.

Government and Regulatory Bodies:

  • Provincial (state) departments, like the MEIE in Québec, oversee and regulate the planning process.
  • Energy regulators, such as utility commissions or energy boards (Régie de l’énergie in Québec), ensure compliance and accountability.

Utilities and Grid Operators:

  • Utilities, like Hydro-Québec and Energir, handle energy generation, transmission, and distribution.
  • Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs), when they exists, manage the grid and technical feasibility where applicable. Note: there is no independent operator in Québec.

Knowledge and Innovation Contributors:

  • Academic and research institutions offer expertise, data analysis, and innovative solutions. The Hydro-Québec research centre (IREQ) could contribute, especially if it integrates better into Quebec’s industrial fabric.
  • Private sector experts, such as engineering and business consulting firms, provide knowledge in renewable energy, energy storage, advanced technologies, regulations, and experiences from other jurisdictions.
  • Equipment manufacturers provide indispensable expertise in the design, production, and optimization of the components needed to build and maintain energy systems, ensuring a robust and adaptive supply chain.

Local and Community Stakeholders:

  • Local governments and municipalities address city-specific energy needs and integration efforts.
  • Indigenous communities advocate for rights, priorities, and land use considerations.
  • General public and community groups reflect societal values and secure buy-in for proposed changes.
  • Non-Governmental Organizations (NGOs), including industry and business associations, offer diverse perspectives, often championing sustainability, equity, and innovative solutions that can help bridge gaps between communities, governments, and industries.

Responsibility for IESP Development and Monitoring

The development and oversight of an IESP should be managed by an independent entity equipped with technical expertise, impartiality, and strong stakeholder engagement capabilities.

In Québec, this role has been taken on by the MEIE. Generally, government ministries are well suited to lead IESP initiatives due to their independence, broad stakeholder representation, and authority to address large-scale energy needs. However, they often require technical and operational support from engineering or strategy consulting firms.

Other potential entities to oversee IESP include:

  • Energy Regulators: These bodies ensure compliance and accountability through independent oversight. However, their focus on regulation might limit leadership in strategic planning.
  • Independent System Operators (ISOs) or Regional Transmission Organizations (RTOs): These organizations have strong technical knowledge and operational expertise but are limited by their focus on electricity grids, excluding other energy sources.
  • Utilities: Utilities may lead planning provided they have sufficient coverage across energy sectors. In Québec, however, no single utility dominates both electricity and natural gas markets, making collaborative leadership or support from government entities essential. Ensuring independence of utilities also remains a challenge, particularly for investor-owned utilities.
  • Collaborative Consortia: Partnerships that include government, utilities, academia, and private sector experts can balance expertise and leadership but require clear governance to maintain focus and authority.

Outputs and Timeline

The primary output of an IESP is a comprehensive energy system roadmap. This roadmap must:

  • Account for Diverse Energy Sources: Incorporate electricity, renewable natural gas, hydrogen, biomass, and fossil fuels (in transition) while outlining strategies for integrating new energy technologies and phasing out unsustainable sources.
  • Meet Community Needs: Address the unique energy demands and priorities of various communities, including affordability, accessibility, and cultural considerations, particularly for Indigenous communities and underserved regions.
  • Establish a Long-Term Vision: Provide demand forecasts, resource plans, and investment strategies that align with climate goals, such as reducing greenhouse gas emissions and increasing energy efficiency.
  • Detailed Implementation Steps: Offer policy recommendations, infrastructure upgrade strategies, funding strategies, and specific milestones with timelines to ensure smooth execution.

This approach ensures a balanced, inclusive, and future-ready energy system. The IESP process typically spans 18 to 36 months, depending on scope and complexity. Energy system roadmaps are periodically revised to stay relevant and adapt to changing conditions. Updates integrate new technologies, market shifts, policy changes, and unexpected challenges. Fast-evolving areas like renewable integration or grid resilience may need annual monitoring. Transparent reporting builds public trust and accountability.

Geographic Scope

Integrated Energy System Planning can be implemented at different geographic levels, each offering unique advantages and challenges:

City-Level IESP

  • Focus: Tailored to address local energy demands and urban challenges, such as electrifying transportation or district heating.
  • Advantages: Provides customized solutions with strong community engagement and simplified governance.
  • Challenges: Limited impact on broader regional systems.
  • Example: Vancouver’s Renewable City Strategy (RCS) is a comprehensive plan designed to transition the city to 100% renewable energy by 2050 across all sectors, including buildings, transportation, and energy systems. See https://vancouver.ca/files/cov/renewable-city-strategy-booklet-2015.pdf.

Regional, Provincial, or State-Level IESP

National-Level IESP

  • Focus: Oversees large-scale energy transitions, aligning national policy with climate goals and energy security.
  • Advantages: Ensures consistency in policies and leverages economies of scale.
  • Challenges: May miss regional nuances and specific community needs.
  • Example 1: Denmark’s energy strategy integrates wind energy and district heating on a national scale. This roadmap has been revised multiple times since its inception in the 1970s. See https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2013/GWEC/GWEC_Denmark.pdf.
  • Example 2: Great Britain’s Clean Power 2030 (CP2030) programme aims to ensure that the country can meet its energy needs primarily from renewable sources by 2030. This includes the massive expansion of offshore wind, solar, and battery storage capacity, as well as extending the life of existing nuclear power plants. The programme includes an estimated annual investment of £40 billion, as well as the construction of 1,000 km of power lines and 4,500 km of submarine cables. It should be noted that wind power production in Great Britain is mainly in the North, while energy demand is higher in the South, a situation like that of Québec. See https://www.neso.energy/publications/clean-power-2030.

Continental or Multi-Country IESP

The Importance of Execution

The success of an IESP depends heavily on its execution. A meticulously designed plan will fall short without a clear pathway to implementation, robust oversight, and ongoing adaptability. Key elements of successful execution include:

  • Alignment with Priorities: Energy regulators and other stakeholders must ensure the investments align with the priorities set forth in the IESP roadmap. Stranded assets and misaligned projects can cause opposition, waste resources, and delay goals.
  • Flexible and Adaptive Management: As technologies, markets, and policies evolve, the energy system must remain flexible. Regular updates to the IESP and the continuous incorporation of new data will allow stakeholders to respond effectively to emerging challenges and opportunities.
  • Technological Integration: Leveraging emerging technologies that drive the energy transition—such as energy storage, electric vehicles, wind and solar generation, AI, advanced analytics, demand response, and real-time monitoring systems—is essential. For utilities and independent power producers, these tools enable more accurate demand and renewable generation forecasting, optimize hydroelectric and other generation systems, improve grid balancing, and facilitate early identification of potential failures. From the perspective of energy users, AI can revolutionize energy management by optimizing heating, cooling, EV charging, local energy storage, and lighting in real time based on occupancy and usage patterns. For industrial plants, smart solutions can minimize energy costs and identify opportunities to shift toward cleaner energy resources like electricity as a heat source. These innovations empower both utilities and energy consumers to collaborate in achieving enhanced sustainability, cost effectiveness, and energy resilience.
  • Stakeholder Coordination: Effective execution requires seamless collaboration among federal and provincial (state) governments, cities, utilities and independent power producers, commercial and industrial energy users, the electricity supply chain, existing fossil fuel industry players, and community groups. Clear communication channels and well-defined roles are essential to ensure alignment and prevent missteps. This collaborative and inclusive approach ensures that all stakeholders contribute to a resilient and efficient energy transition.
  • Public Trust and Transparency: Transparent reporting on progress fosters public trust and secures long-term support. For instance, Denmark’s transparent communication regarding its wind energy projects has significantly increased public buy-in, helping to accelerate renewable energy adoption and achieve ambitious climate goals. Stakeholders must actively engage with communities to maintain accountability and ensure inclusivity.
  • Infrastructure Investments: Adequate and timely investment in critical infrastructure—such as grid upgrades, renewable energy integration, and energy storage systems—is essential. These investments must be planned to handle future growth and extreme weather events.

Risks of Failure

The risks that could lead to ineffective IESP execution include:

  • Growth Challenges: North American electric utilities, which have experienced limited growth since 2000, must adapt and scale operations by a factor of perhaps 3 or 4 by 2050 (but much less in Québec given its already high electrification level) to meet the demands of increasing electrification. This transformation demands the electricity supply chain—encompassing manufacturers, professional service providers, and infrastructure developers—to scale as well. Addressing this monumental operational, financial, and logistical challenge will require innovative strategies, substantial investments, and comprehensive stakeholder coordination.
  • Reliability and Resilience: As utilities transition into becoming the primary energy delivery system within the economy, they must enhance reliability (minimizing outages) and resilience (ensuring robust recovery and adaptability, particularly during extreme weather events).
  • Inflexibility: Rigid adherence to outdated plans can lead to inefficiency and missed opportunities.
  • Underinvestment: Insufficient funding for infrastructure development risks blackouts, bottlenecks, and public backlash.
  • Stakeholder Fragmentation: Lack of coordination among key players undermines progress and wastes resources.
  • Delayed Action: Hesitation in adapting to changing conditions exacerbates existing challenges, pushing back timelines for achieving goals.

By proactively addressing these risks and prioritizing execution excellence, Québec can ensure that its IESP delivers on its promise of a resilient and sustainable energy future.

Recommendations for Québec

  1. Establish an Independent Planning Body: Consider an independent energy planning agency for Québec, modelled after entities like Ontario’s Independent Electricity System Operator (IESO).
  2. Foster Stakeholder Engagement: Promoting the involvement of municipalities, Indigenous communities, and private sector actors can enrich the planning process by incorporating diverse perspectives and expertise.
  3. Leverage Existing Strengths: Build on Hydro-Québec’s expertise in hydroelectricity and transmission grid management and on the large electricity supply chain in Québec.
  4. Focus on Resilience: Prioritize infrastructure upgrades to accommodate electrification and extreme weather events.
  5. Set Clear Metrics: Define performance indicators to track progress and adapt plans as necessary.

Conclusion

Integrated Energy System Planning offers Québec a roadmap to a sustainable, electrified future, fostering energy resilience, economic growth, and environmental stewardship. By embracing best practices, addressing execution challenges, and aligning efforts with provincial strengths, Québec can position itself as a global leader in the energy transition.